City's New View of Welfare: A Job for Businessmen

Like managers everywhere, the new men at the Department of Social Services talk of productivity, time studies, utilization rates and cost‐benefit ratios. And they talk of the “bottom line,” meaning the place on the balance sheet where you read the profit or loss.

They don't quite promise a profit, but they do promise success—a conventional enough pledge for managers, which in the case of the Department of Social Services tends to sound a little like a prospectus from an alchemist's shop. For what they aim to turn into a success is the welfare system in this city, with its 1.2 million clients at the bottom of the social structure and its six million or so grumbling critics piled on top.

“Welfare is just a fantastic area, a fantastic opportunity,” exults Arthur H. Spiegel, who became the department's executive director last August at the age of 32, four years after graduating from the Harvard Business School.

With that approach and a budget authorization of $3‐million for 200 new administrative positions in the department, Mr. Spiegel has hired 70 managers, data‐processing specialists and industrial engineers since October—mostly from private industry at salaries competitive with what they earned there.

“And it's exciting in another respect, which is that welfare policies are up for grabs today —there are no truths. So in very broad terms, it's a good time to be in welfare.”

‘Patchwork’ Computing

Or, as the challenge was expressed in a want‐ad addressed to “Results Oriented MBA's [Masters of Business Administration] & Engineers” that appeared in the financial pages of The New York Times last month: “We've been charged with turning around a three‐billion‐dollar Government agency and have two years to do it.”

As a beginning, the new men are busy ranking the 41 welfare centers according to their performance and productivity, as calculated on a computer. Top officials of centers that finish low in the standings that are posted in a special “war room” at headquarters can expect to be shifted to other jobs.

“Social workers are fine,” Mr. Spiegel said, “but these are problems that need real resources, real teeth. It's the biggest data‐processing show in town, and it's a patchwork. Just unbelievable. Go into Chase Manhattan and ask them how many programs they've got on their computers. We've got 1,000, and the way they put it together, it's like a children's doodle.”

Often the new men at Welfare describe themselves as “internal consultants.” And, in fact, the Lindsay administration —frustrated over soaring welfare costs and examples of widespread fraud — turned to them after its use of outside consultants became politically controversial.

‘Virgin Territory’

What attracts them? “It's an opportunity to do something bigger than I've ever done before in my life,” said Kenneth L. Harris, the head of the project management staff, who is only 29. “I wanted to see how good I really was.”

John Alexander, who is 44, left his job as director of corporate management at Allied Chemical to become an assistant welfare commissioner because he regarded city bureaucracy as “vast virgin territory” for an industrial engineer. So far Mr. Alexander has recruited 22 men in his field to the department.

“I visualize the department as a big paper factory,” he said. “You put the client on the conveyor belt at the beginning, and she gets off at the other end with a check or some other service. That's what's supposed to happen. But too often she gets sidelined, and the sideline becomes a second conveyor.”

Kenneth Brody was 41 and an assistant vice president at the American Stock Exchange in charge of “systems development” when he came to the Department of Social Services to run its data‐processing operation. He has hired 15 men so far from banks and consultant firms—“with more coming,” he says.

Mr. Spiegel himself fits no stereotype of the smooth manager of calculating bureaucrat. His conversation tends to the monologue, with frequent interruptions by himself and heavy use of profanity. His shirttail is more often out than in, and his shoes, tidier bureaucrats have noticed, tend to have holes in them.

On both the new men and old‐timers in the department, the first impression has often been shocking. One management man remembers thinking when he met Mr. Spiegel at an interview, “He's probably brilliant but he's weird.”

Mr. Spiegel's own view of himself is that he has “a pretty good nose for what's important and a pretty good ability to keep others stuck to it.” One way he has done this at the department's headquarters at 250 Church Street is to decree the posting of signs that ask, “What results have you gotten today?”

The answer provided by one graffitti artist hinted considerable skepticism within the department. “Defacing signs,” he wrote.

Welfare Experts Skeptical

Sometimes that skepticism is personalized. “What's dangerous about Spiegel is that he has no deep commitment to welfare,” declared an expert in the field who was sounded out for a top job in the department.

Sometimes skepticism is expressed in general terms. Mitchell I. Ginsberg, the former Human Resources Administrator, said he thought Mr. Spiegel was “an able guy,” but he doubted that “major social problems” were susceptible to management solutions.

“In fact,” Mr. Ginsberg said, “I'm very skeptical about how well‐run business really is. Think of Lockheed and Penn Central.”

Mr. Spiegel—who is operationally in charge of the department and second only to Jule M. Sugarman, the present H.R.A. chief, as a policymaker —is convinced it will be easy for the new team to pay its way with major savings through the elimination of fraud and backlogs.

But he promises much more —new policies, improved services, an “A to Z lubrication” of the entire welfare system here.

“It's like a moon shot,” Mr. Spiegel said. “You've got to go after the whole thing.”

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A version of this archives appears in print on February 1, 1972, on Page 1 of the New York edition with the headline: City's New View of Welfare: A Job for Businessmen. Order Reprints|Today's Paper|Subscribe